Which type of business financing works for you?
With the financial industry ever evolving, there becomes a wider range of options when looking for business loans. Your typical loan from your local bank or credit union is now competing with other types of financial sources. In previous posts, we’ve discussed business cash advance, SBA loans, and merchant cash advance. But there’s so many other ways to fund your business, and I’m not talking about asking your family members. One unconventional way has taken the financial market place by storm, it’s called “crowdfunding” also known as “crowd source funding”. Crowdfunding as you already know being one of those tools, has gained some recent attention on financing startups. Kickstarter which was founded in 2009 is one of the most recognized names in this arena, and has gained some huge traction. Though it seems crowdfunding has only been around for less than a decade, the reality is this has been around for centuries. The definition of crowdfunding: is a group of people (usually non-accredited investors) pooling their money/investment to invest in a company in exchange of shares for that company. Because of the internet and social media, this type of funding has become more viral, and has made it possible for all types of investors to invest in a company/project. Even though crowdfunding is being scrutinized by the Securities and Exchange Commission, the industry leaders feel there will be a resolution to this type of funding later this year. This financial model has only way to go, and that’s up!
How does crowdfunding work?
If you’re not familiar with crowdfunding, it’s pretty simple. These are all independently created projects, films, artists, etc. They are all in search for one thing, funding for their idea from the public. These creators set a desired amount needed to start their project, and the public can invest in their idea if they like it, if the project does not reach their funding goal, the funds are returned to all investors. With that being said, this might be a solution for financing your small business. There are several sites that provide this financial tool. Do some research and view the other projects that are being offered. You’d be surprised at the type of projects that are being offered!
If crowdfunding isn’t the right fit for your business, you can still turn to traditional business loans from your bank. If you can provide tax returns for the past two to three years, and if the principles of the company have good credit there should be no reason why your business can’t get a traditional business loan. If you can’t provide tax returns showing a profit, and/or if the principles have less than perfect credit there’s always working capital loans from companies like First Capital Business Finance.
If you’re interested in hearing more about our business financing programs, please feel free to call First Capital Business Finance 888-565-6692 and one of our loan experts will be happy to answer any of your questions.